cat" bosses, foundation hospitals and university top-up fees on the opening day of the TUC Congress today with union leaders warning of industrial action.

President of the TUC, Nigel de Gruchy, was

expected to tell the Congress in Brighton that the country faces more strikes unless the Government addresses the gap between the pay and

conditions of workers and executives.

In his presidential address, he was expected to say that public service workers are among the lowest paid in the country and that their

conditions worsened when their jobs were privatised.

Mr de Gruchy, former leader of the teaching union NAS/UWT, was also expected to argue that the TUC was right to say earlier this year that the case for war with Iraq had not been established and should only take place with full backing from the UN.

Meanwhile, a row loomed over trades unions funding of the Labour Party, with reports claiming union leaders have blocked a five-year funding deal sought by the party's general secretary David Triesman.

Dave Prentis, Unison general secretary, told The Guardian: "There will be no long-term deal this side of the election."

At the same time, Leader of the Commons Peter Hain said the Government was considering the state funding of political parties. Mr Hain, who chairs a new Cabinet committee on electoral policy which is drawing up a policy on state funding, said: "Everyone agrees it is not desirable to have parties relying on donations from companies or even trade unions." He insisted state funding was not "a Trojan Horse" for breaking the link between the unions and Labour, adding: "The umbilical cord that links Labour to the trade unions is absolutely critical."

On the eve of the TUC Congress yesterday, TUC General Secretary Brendan Barber released new figures showing hundreds of thousands of people were working long hours against their wishes.

The TUC claimed 350,000 people had been given no choice about opting out of the European Working Time Directive, while three million people who worked more than 48 hours had not even signed the opt-out.

There will be a huge row later this year when the opt-out will be reviewed by the European Commission.